The Privacy Rights Clearinghouse (PRC) is please to write in support of the Department’s continuing efforts to protect California consumers from adverse insurance decisions based on error ridden claims history reports. A steady stream of consumer complaints filed with the Department as well as the PRC’s experience with consumer concerns make further action by the Department both justified and necessary.

Under the current proposal, the Department will readopt existing regulations that require insurers in the California homeowners’ market to take additional steps to verify information included in reports issued by insurance-support organizations such as ChoicePoint’s in its Comprehensive Loss Underwriting Exchange (CLUE) reports. We note that the PRC, joined by Consumer Action and Consumers’ Union, submitted extensive comments in response to the Commissioner’s original proposal to adopt standards for California insurers. Our September 17, 2003, comments are available on our web site. www.privacyrights.org/ar/clueinsur.htm

As the proposal to readopt existing regulations notes, consumers may have their insurance coverage cancelled or not renewed based on inaccurate or incomplete information included in a CLUE Report. The proposal also notes that the Department has continued to receive numerous complaints despite the fact that insurers are prohibited from relying solely on information in CLUE Reports. These complaints -- and insurers’ apparent persistence in relying solely on suspect information -- warrant strong action by the Department.

Shortly after our comments were submitted to the Commissioner’s original proposal, the PRC, in keeping with its mission to educate consumers, published a fact sheet entitled CLUE and You: How Insurers Size You Up, www.privacyrights.org/fs/fs26-CLUE.htm. The fact sheet was published in response to inquiries and complaints received on our consumer hotline and via e-mail. Like the Department, the PRC continues to receive complaints from consumers whose CLUE Reports include erroneous or incomplete information.

Consumer complaints and inquiries received by the PRC show not only that CLUE Reports are error ridden but that consumers are generally frustrated in attempting to correct inaccurate information. Considering the ongoing consumer problems experienced because of inadequacies in the insurance claims databases, it is entirely reasonable for the Department to require that insurers obtain further relevant information from an independent source.

We encourage the Department to continue its efforts on behalf of California insurance customers.